Open: London Session | Forex, Metals, Oil, Agriculture August 10, 2020



The dollar bonds of developing nations rose on average for a 15th week, the longest streak since 2009. The dollar has sunk of late and it seems as everyone is bearish on the dollar. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. After remaining net short euro futures since October 2018, they switched to net long in the week ended March 17. If Europe s disquieting resurgences of Covid turn into a more serious wave over the next few months, it will also knock away a key reason for dollar weakness.
Meanwhile, Vamvakidis is arguing that the market consensus the dollar is in a prolonged downward trend is down to complacency about seven known unknowns. The answer could be critical for the future of the dollar, which has weakened significantly over the period in which Covid has come under control in Europe. Lots of talk of currencies and the US dollar and that is moving markets.
A rise in the dollar would hurt precious metal prices. The euro’s recent rally comes in the midst of massive expansion in the European Central Bank’s balance sheet.


While the copper’s price rise has outstripped that of gold recently, it has yet to break out of its long-running downward trend relative to gold. This significant improvement in the earnings trend is a result of the lower costs, but mostly the much higher gold price. In 2017, gold miners underperformed, even as gold rose steadily, revealing that there isn’t a hard-and-fast relationship between the two. These improved operating metrics contributed to quarterly gold production of 35,400 ounces at the mine, up 18% year over year, and up 22% from Q1 2020.
Based on these solid results, the mine remains on track to hit its guidance of 125,000 ounces at the midpoint, with 71,000 ounces of gold produced year to date. The main reason for gold’s surge is this year’s precipitous drop in US Treasury yields below the expected pace of inflation. Markets headed ever higher as investors refused to believe that Congress would pass up a gold plated chance to spend with reckless abandon in an election year.
Based on the significant improvement in the gold price, I have reversed my thesis from Sell above $0.62 to Speculative Buy at $0.72. Our gold holdings are up 35% year to date while our S&P holdings are up 5%. Having said that, I have no plans to start a position in the stock as I see much better opportunities elsewhere in the sector among the higher-margin gold producers.


Estimates suggest volumes in the range of 6.3 – 19.0 million standard cubic meters (MSm3) of recoverable oil equivalent, or 40 – 120 million barrels of oil equivalent (boe). The country’s oil income is sharply affected this year due to weak crude oil prices. Europe’s largest oil producer (excluding Russia) is heavily exposed to the oil industry, which accounts for about a fifth of the country’s revenue. Norway agreed to cut its oil output from June until December, by 250,000 barrels a day in June and 134,000 barrels in the second half of the year.
Measures taken such as temporary tax relief could boost oil firms’ liquidity by as much as 100 billion NOR crowns over next couple of years. Focusing on North Sea’s total crude oil loadings, activity is expected to hit this year’s record low in September. This new field of 2.7 billion barrels has rejuvenated Norway’s oil production. In our retail natural gas segment, gross margin was $9.4 million compared to $8.1 million in the second quarter last year.
Meanwhile, Neptune Energy recently announced this year’s largest oil discovery in Norway, at its Dugong well (PL882) in the North Sea.
The cut will include oil fields on the Norwegian Continental Shelf, being well distributed between the fields and different companies involved.

United States

Trump signed executive orders to widen jobless benefits, defer payroll taxes, prevent evictions and give student-loan relief, though Nancy Pelosi was unimpressed. Treasury Secretary Steven Mnuchin said he would listen to any proposal offered, while Trump announced four executive actions to work around the impasse on Saturday. Markets got what they were looking for anyway as Trump signed executive orders this weekend for more fiscal stimulus. Treasury Secretary Steven Mnuchin said he’d listen to any proposal offered by Democrats and Nancy Pelosi said she hopes talks with the White House will resume soon.
Donald Trump s dramatic intervention is unlikely to resolve the uncertainty anytime soon, given the extent of opposition to his executive orders. Donald Trump’s executive actions announced Saturday will likely provide the initial focus for traders. I suggested last week that the chance of Trump s re-election was growing, and this wasn t reflected in markets.
The Trump administration has also led the way in condemning China over its crackdown on pro-democracy activists in Hong Kong, where media tycoon Jimmy Lai was arrested on Monday. U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi signaled readiness to resume negotiations on pandemic relief without setting a date. Trump’s move to ban U.S. citizens from doing business with the TikTok and WeChat apps pressured developing-nation stocks, currencies and local-currency bonds on Friday.


Sunday also saw the arrival of the highest-ranking U.S. official to Taiwan in decades, risking Beijing’s ire. The national security legislation was Beijing’s response.


That success was put down to local knowledge and a Blackburn phone number, instead of the 0300 number used by Boris Johnson’s “world-beating” centralised system, which provokes suspicion. Global powers pledged almost $300 million to support the country at a virtual donors conference co-hosted by Emmanuel Macron and the UN. The EU has also threatened sanctions over the past month as the crisis has grown. It is also possible that the EU did a worse job of protecting the elderly.
Emmanuel Macron and Mahamadou Issoufou pledged to keep fighting terrorism in the Sahel region.